Question

6. The table below contains data on income inequality and infant mortality for 21 OECD countries. Income inequality is measured as the 20:20 income ratio, which compares the average income for the top 20% of earners to the average income for the bottom 20%. The infant mortality rate refers to infant deaths in the first vear of life. It is measured as the rate per 1,000 live births in the population. Does inequality affect infant mortality across OECD countries? For this combination of variables: compute the slope (b), the intercept (a), r, and r. Write a short paragraph interpreting the relationship between these variables. Round to four places past the decimal for your calculations and final answers Infant Income Inequality Mortality Rate Countr Australia Austria 4.82 4.6 5.63 4.3 3.72 5.6 5.2 6.2 6.05 6.65 3.4 5.3 6.8 3.85 3.9 3.5 Belgium Canada Denmark Finland France Germany Greece Ireland Italy Japan Netherlands New Zealand 3.4 2.3 3.6 3.4 3.8 3.8 3.4 2.3 3.8 5.2 2.8 2.5 3.2 2.5 3.8 4.2 orway Portugal Spain Sweden Switzerland United Kingdom United States 5.55 3.95 5.73 7.17 8.55

Answer 1

Income Inequality(x) Infant Mortality Rate(y) 4.82 4.6 5.63 4.3 3.72 5.6 5.2 6.2 6.05 6.65 3.9 5.1 2.3 3.8 3.8 2.3 3.8 5.2 2.8 2.5 3.2 2.5 3.8 4.2 5.3 6.8 3.85 5.55 3.95 5.73 7.17 8.55

Please find the excel output for Regression:

SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square0.360785507 Standard Error Observations 0.626694688 0.392746232 0.770860537 21 ANOVA df MS Significance F Regression Residual Total 17.3020875587.302087558 12.28840197 0.002365731 19 11.29029339 0.594225968 20 18.59238095 Coefficients Standard ErrortStat 1.241399068 0.708047042 1.75327202 0.095674765 -0.240560423 2.723358558 P-value Lower 95% Upper 95% Intercept Income Inequality(x) 0.428818663 0.122328028 3.505481703 0.0023657310.172783159 0.684854168

So Regression Equation is:

Infant Mortality Rate(y) = Income Inequality(x) * 0.4288 + 1.2413

Slope = 0.4288

Intercept = 1.2413

r = 0.6266

r² = 0.3927

From above equation we can say that, if income inequality increases by 1 unit, there is an increase of 0.4288 units in infant mortality rate.

Also with an r² value of 0.3927, we can say that 39.27% of variance in Infant mortality rate is explained by Income Inequality.

There exists a moderate correlation between Infant mortality rate and Income Inequality.